Korea has carried out "processing trade-led-growth strategy" since the 1960's, and has imported productive goods mainly from Japan required for maintaining this strategy, Consequently, Korea has the chronic problem of over-dependence on Japan for impo...
Korea has carried out "processing trade-led-growth strategy" since the 1960's, and has imported productive goods mainly from Japan required for maintaining this strategy, Consequently, Korea has the chronic problem of over-dependence on Japan for imports. This is a more serious problem for Korea because the over-dependence on Japan is caused by the proximity of the two nations and the cul-tural similarities between them rather than by complementarity of comparative advantage structure.
In the case of machinery and equipment, the main cause of over-dependence upon Japan is the adaptation of Korea's technolo-gical structure to that of Japan due to cultural similarities and the historical background of the two countries. In the case of raw materials and parts the main cause is prompt delivery due to the short phyical distance between the two countries.
Moreover, most Korean companies have buying schedules of such a short duration because of weakness of financial structure. As a result, they tend to put the first priority on promptness of delivery in the imports of raw materials and parts. I be-lieve that this aggravates the over-dependence on Japan as a neighboring country in Korea's imports.
However, I have discovered in the result of my survey that-the shortage of technical and commercial information about mach-inery and equipment, raw materials and parts produced in the other countries is one of the serious difficulties in changing imports sources. Small and medium size importers have transacted 95% of Korea's imports from Japan. These companies have constr-aints in import marketing research ability, for they are deficient in capital, overseas marketing networks, and specialization of trade. Therefore it is di-ficult for them to overcome such con-straints in imports as short physical, social and cultural dis-tance to Japan by themselves. This implies that we are in urgent need of a policy to expand import information from many countrices and to enlarge the international horizon of the small and medium size importers, so that it improves the over-dependence on Japan.
In view of complementarity of comparative advantage structure between Korea and developed countries, the following countries are recommendable as alternative sources of imports from Japan: U.S.A. Netherlands in. food products, U.S.A. Belgium in raw mater-ials, US.A. Germany, France, Italy, Belgium and Netherlands in chemicals, U.S.A., Germany, England, France, Italy, and Belgium in machinery.
Finally, in connection with improving over-dependence on Japan it is also important to develops domestic technology and to deversity sources of introducing Capital and technology, con-sidering ,that adaptation to Japan of Korea's technological structure is one of the serious causes of over-dependence on Japan.